It
is already common knowledge that employment growth
has been a major casualty of the decade of liberalising
reform. The inadequate pace of employment generation
has been so evident that even the Finance Ministry’s
annual Economic Survey, which has rarely devoted much
attention to the issue in the recent past, has been
forced to take note.
Of course, official sources have attributed the slowdown
in employment generation to the slowdown in the rate
of increase in the labour force, which they claim
is a combination of lower population growth and greater
involvement in education on the part of the 15-19
age cohort. Both of these are obviously to be welcomed.
However, it was already clear from the NSS survey
data that these two factors are not adequate to explain
the slowdown in aggregate employment generation, especially
in the rural areas.
In
addition, because these assessments of employment
generation were based only on the National Sample
Surveys, many had argued that they were not sufficient
to indicate the real trends over the 1990s. For this
reason, the results of the 2001 Census have been eagerly
awaited.
The first estimates from the 2001 Census relating
to employment, work participation and even employment
by industrial category are now available. They do
indicate a slightly different pattern in terms of
employment growth, from the trends emerging from the
NSS. However, the pattern that emerges may be even
more worrying from the point of view of macroeconomic
strategy.
In
this piece we consider only rural trends; the evidence
pertaining to urban employment will be considered
in a later edition of Macroscan. Chart 1 describes
the trends in worker-population ratios in the rural
areas at an All-India level. It is immediately apparent
that there is no drop in this ratio in 2001, unlike
the 1999-2000 NSS which showed a decline in this ratio.
Chart
1 >> Click
to Enlarge
Thus,
according to the NSS, rural male employment fell from
55.3 per cent of the rural male population in 1990-91
to 53.1 per cent in 1999-2000, while that for females
remained broadly the same at around 29 per cent. The
Census data show apparent stability in male worker-population
rates over this period, especially when compared to
earlier decades. And the ratio for rural females has
gone up quite significantly.
This
would appear to bely the more pessimistic conclusions
about rural employment generation that had emerged
from the NSS data. However, it turns out that the
aggregate data refers to both main and marginal workers,
and a disaggregated look provides a very different
analysis. If only main workers are considered, the
decade 1991-2001 has witnessed a very sharp decline
in the proportion of main workers to total population.
As Chart 2 indicates, this is especially marked for
male main workers, whose share has fallen by nearly
7 percentage points.
Chart
2 >> Click
to Enlarge
The
Census category “main workers” refers to those who
had worked in some economic activity for the major
part of the year, that is for a period of six months
(183 days) or more. Work of course, is defined as
participation in any economically productive activity,
but this still excludes a range of unpaid household
work. “Marginal workers” refers to those who had worked
for some time during the previous year, but not for
the major part, i.e. less than 183 days. They are
therefore mutually exclusive categories, analagous
but not identical to the NSS categories of “principal”
and “subsidiary” occupations.
It
is not known whether the definition of work has been
used more flexibly in the 2001 Census to incorporate
some forms of unpaid labour, which were previously
not included. But even if this has occurred, it has
clearly not been sufficient to increase the worker
population ratios significantly in the rural areas.
What is clear is that there is a substantial slowdown
in the generation of employment that would qualify
for “main work”, in other words that there has not
been an increase in the availability of employment
that would keep people productively occupied for half
a year or more.
This
is quite compatible with the NSS evidence on decline
in terms of the usual status definition of employment,
as shown in Chart 3. Indeed, the Census data suggest
an even sharper downward shift, especially for rural
males.
Chart
3 >> Click
to Enlarge
However,
if does suggest a different picture from that mentioned
in the Census of India’s own description, which argues
that there is a “substantial increase in female work
participation rate”. As we have seen, the increase
is actually quite small, and in any case is composed
entirely of an increase in the proportion of marginal
workers. Main workers have actually gone down as a
share of population even in the case of females.
The
pattern is repeated even with a disaggregated analysis
of rural employment in the states, described in Table
1 (total worker-population ratios) and Table 2 (main
worker-population ratios). For the male population
in most states, total worker to population ratios
remained broadly the same over the decade, with the
exception of a substantial increase in Kerala and
marginal increases in Karnataka, Tamil Nadu and West
Bengal. There were declines even in total worker-population
ratios in Orissa, Punjab and Utter Pradesh.
Table
1
>> Click to Enlarge
